Tag: Marschak

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Harvard Seminar Speakers

Harvard. International Economic Relations Seminar. Haberler and Harris, 1940-45

 

The most famous economics seminar at Harvard University in the history of economics is undoubtedly the fiscal policy seminar run by John Williams and Alvin Hansen. A list of that seminar’s speakers and their topics was included in an earlier post. Below I provide the reported speaker’s and topics for the “younger” international economic relations seminar jointly organized by Gottfried Haberler and Seymour Harris during the War years.

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EXPANSION OF THE SEMINAR PROGRAM

Several additions have been made in the seminar program of the School [of Public Administration] for the year 1940-1941. Professors Haberler and Harris are presenting a seminar on international economic relations. We planned our seminar program in 1937 on the assumption that it was wise to begin with domestic problems despite the fact that a number of the Faculty had special interests in the international field. In view of the events of the last few years, it seems highly important to develop these interests. The seminar given by Professors Haberler and Harris deals with the application of the principles of international trade to current problems…

Source: Harvard University. Report of the President of Harvard College and Reports of Departments for 1939-40, p. 306.

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1940-41
INTERNATIONAL ECONOMIC RELATIONS SEMINAR
[partial list]

[Seven of the meetings of the Fiscal Policy Seminar were held jointly with other seminars – four with the International Economic Relations Seminar and three with the Agricultural, Forestry, and Land Policy Seminar.]

 

October 11. SVEND LAURSEN, Student, Graduate School of Arts and Sciences, Harvard University.

Subject: International Trade and the Multiplier. (Joint meeting with Fiscal Policy Seminar.)

February 21. HARRY D. WHITE, Director, Division of Monetary Research, United States Treasury Department.

Subject: Blocked Balances. (Joint meeting with Fiscal Policy Seminar.)

March 21. RICHARD V. GILBERT, National Defense Advisory Commission.

Subject: The American Defense Program. (Joint meeting with Fiscal Policy Seminar.)

May 2. GUSTAV STOLPER, Financial Adviser.

Subject: Financing the American Defense Program. (Joint meeting with Fiscal Policy Seminar.)

 

Source: Harvard University. Report of the President of Harvard College and Reports of Departments for 1940-41, p. 323 ff.

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INTERNATIONAL ECONOMIC RELATIONS SEMINAR:
1941-1942. Professor Haberler and Associate Professor Harris

In 1941-42 the seminar devoted its attention to war and post-war problems in the field of International Economic Relations. A few meetings were spent on the discussion of fundamental theoretical problems. During the first semester all meetings were taken up by papers of outside consultants and their discussion. In the second semester student reports were presented and discussed, and a few extra meetings were arranged for outside speakers. The consultants and their topics were as follows:

 

October 1. EUGENE STALEY, Fletcher School of Law and Diplomacy. Economic Warfare.

October 8.[**] CHARLES P. KINDLEBERGER, Federal Reserve Board. Canadian-American Economic Relations in the War and Post-War Period.

October 15.[**] A. F. W. PLUMPTRE, University of Toronto. International Economic Position of Canada in the Present Emergency.

October 22. HEINRICH HEUSER, Fletcher School of Law and Diplomacy. Exchange Control.

October 29. FRITZ MACHLUP, University of Buffalo. The Foreign Trade Multiplier.

November 5. HENRY CHALMERS, United States Department of Commerce. Trade Restrictions in Wartime.

November 12. ARTHUR R. UPGREN, United States Department of Commerce. International Economic Interest of the United States and the Post-War Situation.

November 19. OSKAR MORGENSTERN, Princeton University. International Aspects of the Business Cycle.

November 28.[*] NOEL F. HALL, British Embassy. Economic Warfare.

December 5.[*] ROBERT BRYCE, Department of Finance, Canada. International Economic Relations with Special Reference to the Post-War Situation.

January 26.[*] PER JACOBSSEN, Bank for International Settlements. The Problem of Post-War Reconstruction.

February 13.[*] JACOB VINER, University of Chicago. Monopolistic Trading and International Relations.

February 18. H. D. FONG, Director, Nankai Institute of Economics, Chungking, China. Industrialization of China.

February 25. MICHAEL HEILPERIN, Hamilton College. International Aspects of the Present and Future Economic Situation.

March 11. JACOB MARSCHAK, New School for Social Research. The Theory of International Disequilibria.

March 14.[*] RICHARD M. BISSELL, JR., Yale University and the United States Department of Commerce. Post-War Domestic and International Investment.

March 18. ANTONIN BASCH, Brown University. International Economic Problems of Central and Southeastern Europe.

March 20.[*] ALBERT G. HART, University of Iowa. The Present Fiscal Situation.

April 10. ABBA P. LERNER, University of Kansas City. Post-War Problems.

May 8. HORST MENDERSHAUSEN, Bennington College. International Trade and Trade Policy in the Post-War Period.

 

Six of these were joint meetings with the Fiscal Policy Seminar [*] and two were joint meetings with the Government Control of Industry Seminar[**].

Student reports were presented on the following subjects:

Argentine International Trade.
Exchange Control in Argentina.
Some Aspects of Sino-Japanese Trade.
International Effects of Price Ceilings.
Location Theory and the Reconstruction of World Trade.
Some Post-War Politico-Economic Problems of the Western Hemisphere.
Economic Problems and Possibilities of a Pan Europe, Pan America and Similar Schemes.
The Balance of Payments of China.

 

Source: Harvard University. Report of the President of Harvard College and Reports of Departments for 1941-42, pp. 344-346.

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INTERNATIONAL ECONOMIC RELATIONS SEMINAR
1942-43. Professor Haberler

A larger portion of the time of the seminar than usual was devoted to the discussion of fundamental principles of international trade and finance. This was due to the fact that the graduate course on international trade (Economics 143) was not offered, and the seminar had to take over to some extent the functions of the graduate course.

There were eleven meetings with outside consultants, of which eight were joint meetings with the Fiscal Policy seminar. The smaller number of students made it advisable to combine the two seminars more frequently than usual. The consultants and the topics discussed with them were as follows:

 

November 13. Professor FRITZ MACHLUP, University of Buffalo. (Joint meeting with Fiscal Policy seminar.)

Subject: National Income, Employment and International Relations; the Foreign Multiplier.

November 18. Dr. THEODORE KREPS, Economic Adviser, Board of Economic Warfare, Office of Imports.

Subject: Some Problems of Economic Warfare.

November 27. Hon. GRAHAM F. TOWERS, Governor, Bank of Canada. (Joint meeting with Fiscal Policy seminar.)

Subject: Canadian War Economic Measures.

December 4. LYNN R. EDMINSTER, Vice-Chairman, U. S. Tariff Commission. (Joint meeting with Fiscal Policy seminar.)

Subject: Post-War Reconstruction of International Trade.

December 11. Professor SEYMOUR E. HARRIS, Director, Office of Export-Import Price Control, Office of Price Administration. (Joint meeting with Fiscal Policy seminar.)

Subject: Trade Policy in Wartimes.

February 12. THOMAS MCKITTRICK, President, Bank for International Settlements. (Joint meeting with Fiscal Policy seminar.)

Subject: The Bank for International Settlements.

February 24. Dr. LEO PASVOLSKY, State Department. (Joint meeting with Fiscal Policy seminar.)

Subject: Post-War Problems in International Trade.

March 3. P. T. ELLSWORTH, War Trade Staff, Board of Economic Warfare.

Subject: The Administration of Export Control.

April 12. EMILE DESPRES, Office of Strategic Services, Washington, D. C. (Joint meeting with Fiscal Policy seminar.)

Subject: The Transfer Problem and the Over-Saving Problem in the Pre-War and Post-War Worlds.

April 16. Dr. ALBERT HAHN. (Joint meeting with Fiscal Policy seminar.)

Subject: Planned or Adjusted Post-War Economy.

April 20. Dr. ALEXANDER LOVEDAY, League of Nations.

Subject: European Post-War Reconstruction.

 

Student reports were presented on the following subjects among others: practice and theory of an international bank; post-war industrialization of China; coordination of fiscal policy in different countries; international position of the Brazilian economy; international commodity agreements; international implications for fiscal policy; British exchange equalization account; and Argentine exchange control.

Twelve students were enrolled in the seminar of which four were Littauer fellows, seven graduate students from the Graduate School of Arts and Sciences, and one from the College.

 

Source: Harvard University. Report of the President of Harvard College and Reports of Departments for 1942-43, pp. 246-247.

 

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INTERNATIONAL ECONOMIC RELATIONS SEMINAR
1943-44. Associate Professor Harris

A new approach was tried in the International Economic Relations Seminar this year. We paid particular attention to the international economic problems of Latin America and especially to the problems raised by the great demand for Latin American products for war, the expansion of exports and of money, and the resulting inflation. Attention was also given to the transitional problems in the postwar period, particularly to the adjustments that will be required in exports, imports, capital movements, exchange rates, and the allocation of economic factors. In the course of the year leading government authorities on Latin American economic problems were invited to address meetings of the seminar, which were frequently joint meetings with the Fiscal Policy Seminar or the students of the graduate course in international organization.

The schedule of meetings for 1943-44 was as follows:

 

November 12. Professor HARRIS.

Subject: Inflation in Latin America.

December 9. Dr. CORWIN EDWARDS, Chairman, Policy Board of the Anti-Trust Division of the Department of Justice and Chief of Staff of the Presidential Cooke Commission to Brazil.

Subject: Brazilian Economy.

December 17. Dr. HARRY WHITE, Director of Monetary Research, Treasury Department.

Subject: Problems of International Monetary Stabilization.

January 6. Professor HARRIS.

Subject: International Economic Problems of the War and Postwar Period.

January 10. Professor HABERLER.

Subject: Reparations.

January 14. Dr. N. NESS, Member, Mexican-U. S. Economic Commission.

Subject: Mexico.

January 17. Dr. BEARDSLEY RUML, Chairman, Federal Reserve Bank of New York.

Subject: Economic Budget and Fiscal Budget.

January 21. Dr. P. T. ELLSWORTH, Economic Studies Division, Department of State.

Subject: Chile.

January 24. Dr. DON HUMPHREY, Special Advisor on Price Control to Haitian Government; Chief, Price Section, O.P.A.

Subject: Haiti.

January 31. Dr. ROBERT TRIFFIN, Member, U. S. Economic Commission to Paraguay.

Subject: Money, Banking, and Foreign Exchanges in Latin America.

February 4. Dr. MIRON BURGIN, Office of Coordinator of Inter-American Affairs.

Subject: Argentina.

February 9. Dr. FRANK WARING, Director, Research Division, Office of Coordinator of Inter-American Affairs.

Subject: Broad Aspects of Latin-American Economics.

February 10. Dr. BEN LEWIS, Head of Price Control Mission to Colombia, Special Assistant to the Price Administrator.

Subject: Colombia.

March 9. Dr. HENRY CHALMERS, Department of Commerce.

Subject: Inter-American Trade Practices.

March 31. Mr. HENRY WALLICH.

Subject: Fiscal Policy and International Equilibrium.

 

Source: Harvard University. Report of the President of Harvard College and Reports of Departments for 1943-44, pp. 271-2.

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INTERNATIONAL ECONOMIC RELATIONS SEMINAR
Professor Haberler and Associate Professor Harris

The seminar meetings in the year 1944-1945 may be arranged under the following headings:

  1. Exchanges, Controls, and International Trade (8 meetings)
  2. Regional Problems (8 meetings).
  3. Regional and International Aspects of Domestic Problems (8 meetings).
  4. Lectures and Discussions on International Trade by Professors Haberler and Harris (8 meetings).

Four of the papers presented at these meetings were subsequently published in economic journals.

The schedule of meetings for 1944-1945 was as follows:

November 16. Dr. RANDALL HINSHAW, Federal Reserve Board.

Subject: American Prosperity and the British Balance-of-Payments Problem. (Published in the Review of Economic Statistics, February 1945.)

December 11. EDWARD M. BERNSTEIN, Assistant Director, Division of Monetary Research, Treasury Department.

Subject: The Scarcity of Dollars. (Published in The Journal of Political Economy, March 1945.)

December 15. Dr. FRANCIS MCINTYRE, Representative of the Foreign Economic Exchange on Requirements Board of the War Production Board.

Subject: International Distribution of Supplies in Wartime.

December 21. Dr. ALEXANDER GERSCHENKRON, Federal Reserve Board.

Subject: Some Problems of the Economic Collaboration with Russia.

January 11. Dr. WOLFGANG STOLPER, Swarthmore College.

Subject: British Balance-of-Payments Problem After World War I.

January 22. Dr. WALTER GARDNER, Federal Reserve Board.

Subject: Some Aspects of the Bretton Woods Program.

January 26. Dr. WILLIAM FELLNER, University of California.

Subject: Types of Expansionary Policies and the Rate of Interest.

January 29. Professor WALTER F. BOGNER, Dr. CHARLES R. CHERINGTON, Professors CARL J. FRIEDRICH, SEYMOUR E. HARRIS, TALCOTT PARSONS, ALFRED D. SIMPSON, and Mr. GEORGE B. WALKER.

Subject: The Boston Urban Development Plan.

March 5. Dr. ROBERT TRIFFIN, Federal Reserve Board.

Subject: International Economic Problems of South America.

March 19. Dr. LOUIS RASMINSKY, Foreign Exchange Control Board, Ottawa, Canada.

Subject: British-American Trade Problems from the Canadian Point of View. (Published in the British Economic Journal, September I945.)

March 22. Dr. ROBERT A. GORDON, War Production Board.

Subject: International Raw Materials Control: War and Postwar.

March 26. Dr. HERBERT FURTH, Federal Reserve Board.

Subject: Monetary and Financial Problems in the Liberated Countries.

April 2. Dr. LLOYD METZLER, Federal Reserve Board.

Subject: Postwar Economic Policies of the United Kingdom. (An article based on this paper and written in collaboration with Dr. RANDALL HINSHAW was published in The Review of Economic Statistics, November 1945.)

April 16. Professor EDWARD S. MASON, State Department, Washington.

Subject: Commodity Agreements.

April 23. Dr. ABBA P. LERNER, New School for Social Research, N. Y.

Subject: Postwar Policies.

April 27. Professor JOHN VAN SICKLE, Vanderbilt University.

Subject: Wages and Employment: A Regional Approach.

May 14. Dr. E. M. H. LLOYD, United Relief and Rehabilitation Administration, British Treasury.

Subject: Inflation in Europe.

May 28. Professor LEON DUPRIEZ, University of Louvain, Belgium.

Subject: Problem of Full Employment in View of Recent European Experience.

May 29. Professor SEYMOUR E. HARRIS, Professor WASSILY W. LEONTIEF, Professor GOTTFRIED HABERLER, Professor ALVIN H. HANSEN.

Subject: The Shorter Work Week and Full Employment.

 

Source:   Harvard University. Report of the President of Harvard College and Reports of Departments for 1944-45, pp. 285-6.

 

Categories
Chicago Economist Market Economists

Chicago. Marschak on potential hires for department, 1946

 

In his magnificent article about the departmental politics behind the appointment of Milton Friedman at the University of Chicago in 1946, David Mitch refers in passing to a February 1946 memo written to the Chancellor and President of the University by Vice-President Rueben G. Gustavson in which the Vice-President reports on a discussion he had with Jacob Marschak about various economists being considered for appointment.

Mitch’s online Appendix to his article provides an excellent selection of archival artifacts to which the transcription of the Gustavson memo below may be added. In this memo it looks like we are observing active lobbying (at least providing his “spin”) on Marschak’s part rather than a senior faculty member summoned by an administrator to provide deep background on prospective hires.

It is worth noting that the names of five future Nobel prize winners in economics can be found in a single 1946 memo. It is also interesting that the last two candidates mentioned in the memo, namely Lloyd Metzler and Milton Friedman, were the only two to turn out to become permanent acquisitions of the department.

 

See: David Mitch, “A Year of Transition: Faculty Recruiting at Chicago in 1946,” Journal of Political Economy 124, no. 6 (December 2016): 1714-1734. [working paper version (ungated)]

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Biographical Note of Rueben Gilbert Gustavson

Rueben Gilbert Gustavson was born (April 6, 1892-February 24, 1974) to Swedish immigrants James and Hildegard Gustavson. As a young man Gustavson developed a strong belief in moral responsibility to others. After a childhood injury made following in his father’s footsteps as a carpenter impossible he attended high school where he excelled in his studies. In deference to his father’s wish he learn practical skills Gustavson took courses in typing and stenography. These classes enabled Reuben to gain employment with Colorado and Southern Railroad where he became secretary to the auditor. The monies Gustavson earned working at the railroad enabled him to enroll in at the University of Denver, DU. After obtaining his bachelor’s degree DU Gustavson decided to pursue a master’s degree in chemistry. He received his MS in chemistry in 1917 and briefly became a chemist at the Great Western Sugar Company. He accepted an offer to teach at the Colorado Agricultural College in Fort Collins but became disillusioned when told that as a professor he could not teach and conduct research. Gustavson returned to DU where he remained for the next seventeen years. During that time he spent summer breaks working toward his PhD at the University of Chicago. Initially, specializing in radioactivity the loss of his advisor enabled him to change to biochemistry. Gustavson received his PhD in 1925 and taught at the University of Chicago during the 1929-30 academic year. A disagreement over what Gustavson felt were unethical practices involving student athletes led to him leaving DU. University of Colorado President, George Norlin, invited Gustavson to join the faculty as a professor of chemistry. He was appointed chairman of the chemistry department and remained in that position from 1937-42. In 1942 the Dean of the Graduate School became ill and Gustavson was chosen as a temporary replacement but when the dean died the position became permanent. Now involved in the academic administration of the university Gustavson was chosen to substitute for the new president of the University of Colorado, Robert L. Stearns, during World War II. Stearns was commissioned as an officer in the Army Air Corps. Gustavson accepted the position with the understanding that Stearns would resume the presidency when he returned. After the war Gustavson became the Vice President and Dean of Faculties at the University of Chicago for a short time in 1945-46. During Gustavson’s time at the University of Chicago he worked with Enrico Fermi and Edward Teller on the atomic bomb project. The destruction of Hiroshima and Nagasaki convinced Gustavson the only hope for human survival was the promotion of peace through education that taught appreciation of other peoples and cultures. In 1946 Gustavson moved to the University of Nebraska where he remained as Chancellor until 1953. After leaving the University of Nebraska Gustavson became the first president of Resources for the Future where he served from 1953-1959. An outgrowth of his work on the atomic bomb project this organization conducted economic research and analysis to help craft better policies on the use and preservation of natural resources. Gustavson then resumed teaching at the University of Arizona and was a member of the chemistry department from 1960 until his death in 1974.

Source: John Patrick McSweeney. The Chancellorship of Reuben G. Gustavson at the University of Nebraska, 1946-1953. Lincoln: Digital Commons @ University of Nebraska, 1971.

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Gustavson Memorandum of Discussion with Jacob Marshak

THE UNIVERSITY OF CHICAGO

Date February 19, 1946

To:     RMH [Robert Maynard Hutchins, President of the University of Chicago (1929-45); Chancellor (1945-51)]; ECC [Ernest Cadman Colwell, President of the University of Chicago (1945-51)]
From: RGG [Reuben G. Gustavson, Vice-President of the University of Chicago (1945-1946)]

Professor Marschak came in to talk to me about possible recommendations for men in the Department of Economics. He discussed the following:

  1. John Hicks of London. He is now at Oxford but is coming to this country. He is about forty years of age. He is quite well known, especially for his book called the “Brainwork of Social Economy.” [sic, The Social Framework: An Introduction to Economics] This book is now being used in the College.
  2. Paul Samuelson is a much younger man than Hicks. He is now an associate professor at M.I.T. He is known for his work in the general theory of disequilibrium.
  3. Arthur Smithies is professor at the University of Michigan. He is now in the Bureau of the Budget at Washington. Marschak describes him as a man who is concerned with economic policies. He takes the empirical approach to the study of economics.

Marschak states that Mr. Hicks is also a good man in local finance [Hicks’ wife, Ursula Hicks, probably mentioned by Marschak]. He says also that T. Koopmans, Research Associate with the Cowles Commission, who has been recommended for an associate professorship, is a very fine man. He is in mathematical statistics. He speaks highly of Lionel Robbins of the London School. Marschak says he is an all-around personality. He has been of great service to the English government during the war.

He thinks very highly of Lloyd Metzler. He was an instructor at Harvard. He as applied the modern methods of Samuelson to international trade.

Professor Marschak also thinks very highly of Milton Friedman, who is a graduate of the University of Chicago.

I shall discuss all these men with Schultz.

 

Source: University of Chicago Library, Department of Special Collections. Office of the President. Hutchins Administration. Records. Box 284, Folder “Economics, 1943-1947”.

 

Image Source: Reuben G. Gustavson from University of Chicago Photographic Archive, apf1-06588, Special Collections Research Center, University of Chicago Library.

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Chicago Suggested Reading Syllabus

Chicago. Readings for Marschak’s course on statistical applications to economics, 1946

 

 

Another jewel in the Norman M. Kaplan papers at the University of Chicago Archives are his notes from Jacob Marschak’s course “Applications of Statistics to Economics”. In this posting I have only transcribed the reading lists for the course, there is of course much more course content in Kaplan’s notes. 

A Biographical Memoir was written by Kenneth Arrow and published by the National Academy of Sciences.

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Course Announcement

  1. Applications of Statistics to Economics. Statistical testing of economic theories. Numerical estimation of demand and cost functions and other functions occurring in the theory of the firm and household, the theory of markets and the theory of national income. Estimation of economic models. Statistical prediction under conditions of changing economic structure and policy. Prereq: Econ 211, 301 or equiv. Aut: TuTh 3-5; Marschak.

 

Source:   University of Chicago. Announcements (Vol. XLVI, Number 4: May 15, 1946). The College and the Divisions, Sessions of 1946-1947, p. 222.

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First Course Reading List

ECONOMICS 314. Autumn 1946.

Recommended Readings    (First Installment)

(The material is arranged in the order of the lectures during which it is mentioned for the first time)

I

M. Ezekiel. Methods of correlation analysis. 1941. [Useful for first orientation and for practice. Does not give adequate account of (a) fundamentals of statistical logic; (b) peculiarities of statistical economics.]

T.C. Schelling. Raise profits by raising wages? Econometrica 1946, pp. 227-234. [Good formulation of a policy problem, inserting plausible numerical values of economic parameters.]

Henry Schultz. Theory and measurement of demand. 1938 [See in particular (a) the historical parts concerning Gregory King, Jerome Marshall, Letfeldt, H. L. Moore; (b) shifts of demand and supply curves treated on pp. 72-83.]

A.C. Pigou. Economics of Welfare, Appendix II, §1 (and footnote on Moore).

Elmer Working. What do statistical demand curves show? Quarterly Journal of Economics. 1927.

Ragnar Frisch. Pitfalls in the Statistical Analysis of Demand and Supply Curves. 1933.

Ragnar Frisch and B. D. Mudgett. Statistical correlation and the theory of cluster types, Journal of American Stat. Ass. 1931. [read pp. 375-381 only.]

L. Klein. Pitfalls in the statistical determination of the investment schedule. Ecometrica 1943, pp. 240-258.

J. R. Hicks. Mr. Keynes and the Classics, Econometrica. 1937.

J. Tinbergen. Statistical Testing of Business Cycle Theories, Vol. II: Business fluctuations in U.S.A. 1919-1932. League of Nations. Geneva 1937.

Paul Douglas. The Theory of Wages. 1934.

J. Marschak and W. Andrews. Random simultaneous equations and the theory of production. Econometrica 1944. (Read also the articles of Reder and of Bronfenbrenner treated in appendix 2 of the article).

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Second Course Reading List

ECONOMICS 314     Fall 1946.

BIBLIOGRAPHY, Second Installment

Production and Cost Functions.

J. Tintner. A note on the derivation of production functions from farm records. Econometrica, 1944.

Joel Dean. The Relation of Cost to Output for a Leather Belt Shop. National Bureau of Economic Research, 1941.

Joel Dean. Statistical Cost Functions of a Hosiery Mill. Journal of Business, 1941. The University of Chicago. 1941.

Joel Dean. Articles on Cost Functions in the Journal of Business, 1936, 1941, 1942.

U.S. Steel Corporation. Pamphlets and Charts submitted to the Temporary National Economic Committee; esp. Volume I Pamphlets No. 5 and No. 7, 1940.

Ragnar Frisch. The Principle of Substitution. An example of its application in the chocolate industry. Nordisk Tidskrift for Tenisk Økonomi. September 1935.

R.G.D. Allen. Mathematical Analysis for Economists. 1930. Look up the index to locate numerous references and exercises to the problem of cost and production functions.

Family Budgets and Demand Functions.

National Resources Planning Board. Consumer Expenditures 1935-1936. Washington 1939.

Allen, R. G. D., and Bowley. Family Expenditure, A Study of its variation. 1935.

J. Marschak. Personal and Collective Budget Functions. Review of Economic Statistics. 1939.

J. Marschak. Money Illusion and Demand Analysis. Review of Economic Statistics. 1943.

H. Staehle. Relative Prices and Postwar Mariets for Annual Food Products. Quarterly. Journal of Economics. February 1945.

 

[Handwritten note on back: “Lange’s Price Flexibility & Haavelmo’s Probability Approach available for sale at Cowles Comm.?”]

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Marschak’s questionnaire for students taking course

By filling out this questionnaire, you will enable the instructor to adjust the course Economics 314 to the prevailing level of the students.

U. of C. Courses
(Dept. and No.)		 Other Courses Other Training
or Experience
Economics, theoretical
Economics, descriptive
Mathematics
Theory of Statistics

Further relevant information on previous training:

 

Name three problems to exemplify the application of Statistics to Economics

 

 

Source: University of Chicago Archives. Norman M. Kaplan Papers, Box 3, Folder 3.

Image Source:  Portrait of Jacob Marschak in the Biographical Memoir “Jacob Marschak, 1898-1977” written for the National Academy of Sciences by Kenneth Arrow (1991).

 

Categories
Courses New School Suggested Reading Syllabus

New School for Social Research. Elementary Mathematical Economics. Marschak’s Readings, 1940

 

The previous posting provided a list of economics courses announced for 1939-40 at the Graduate Faculty of Political and Social Science at the New School for Social Research. There we read that Dr. Jakob Marschak was to take over the courses taught by Gerhard Colm during the latter’s leave of absence to work in Washington, D.C. It just so happens that in the Papers of Franco Modigliani at Duke’s Economists’ Papers Archive I happened to have found the following reading list for Marschak’s course, Elementary Mathematical Economics, from the Fall term of 1940. Links to almost all of the books on Marschak’s list have been provided below. Those interested in the articles will need to go to a research library with access to jstor.org or having (gasp) hard-copy journal volumes in their collections.

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Graduate Faculty of Political and Social Science
New School for Social Research, 66 West 12 Street, New York City

Fall 1940

Elementary Mathematical Economics
Dr. Jakob Marschak

*Available in New School Library

I. Introductory and General

*Allen, R.G.D. Mathematical Analysis for Economists. 1938
Thompson, S. Calculus Made Easy. 1919
Fisher, Irving A Brief Introduction to the Infinitesimal Calculus. 1897
Osgood Introduction to the Calculus. 1922
   “ Advanced Calculus. 1925.
Courant Differential and Integral Calculus. 2 volumes (1934, 1936)
[Volume One; Volume Two.]
Evans, G. Mathematical Introduction to Economics. New York. 1930
Bowley, A. Mathematical Groundwork of Economics. Oxford. 1924

 

II. Statics of National Output (Macro-Statics)

*Fisher, Irving The Purchasing Power of Money
Marschak, J. Stationary Society with Monetary Circulation. Econometrica. 1934.
Hicks, J. Mr. Keynes and the Classics. Econometrica. 1937

 

III. Statics of Consumers and Firms (Micro-Statics)

(a) Consumers

Edgeworth, F. W. Mathematical Psychics. 1883 (re-edited recently)
*Marshall, A. Principles of Economics. Mathematical Appendix (8th edition)
Hicks, J. and Allen, RGD A Reconsideration of the Theory of Value, Economica. 1934
Hicks, J. Capital and Value. Chapters I – IV 1939
Hotelling, H. Demand Functions with Limited Budgets. Econometrica. 1935
Marschak, J. Personal and Collective Demand Functions. Review of Economic Statistics. 1939

(b) Firms

*Cournot, A. Mathematical Theory of Wealth. 1838. American edition by Irving Fisher. 1927
Hicks, J. Survey of Economic Theory: Imperfect Competition. Econometrica. 1935
Brown, E. H. Phelps Efficacy of Factors of Production. Econometrica. 1936. (3 articles)

(c) General Equilibrium and Distribution

Fisher, I. Mathematical Investigations on Value. Re-edited 1925. New Haven
Walras, L. Éléments d’Économie Politique Pure. 1936
Pareto, V. Manuel d’Économie Politique
Hicks, J. & Walras L. Econometrica. 1934
*Wicksell, K. Lectures, Volume I
Kalecki, M. The Determinants of Income Distribution. Econometrica. 1938
*Douglas, P. The Theory of Wages. New York. 1934
Edelberg Production and Distribution. Econometrica 1936
Fisher, I. The Theory of Interest. 1930

 

IV. Dynamics

Whitman Dynamics of Costs. Econometrica. 1936
Kalecki, M. Essays in the Theory of Economic Fluctuations. London. 1939
*Tinberbergen, J. Verification of Business Cycles Theories. 2 volumes. Geneva. 1939

[Statistical Testing of Business-cycle Theories:
Part I: A Method and Its Application to Investment Activity. 
Part II: Business cycles in the United States of America, 1919-1932]
   “ Explanations: Review of Economic Studies 1940. Economic Journal. 1940
Frisch, R. Propagation in Dynamic Economics, in Economic Essays in Honor of Gustav Cassel, London, 1933.

 

V. Economics and Probabilities

Hagstroem. Pure Economics as a Stochastical Theory. Econometrica. 1936
*Knight, F. H. Risk, Uncertainty and Profit. New York. 1921 and 1933
Pigou, A. C. Economics of Welfare: Appendix on Risk
Marschak, J. Money and the Theory of Assets. Econometrica. 1938
Neyman, J. Lectures on Mathematical Statistics. Chapters on Time Series. Department of Agriculture, Washington

[Lectures and Conferences on Mathematical Statistics, mimeographed, 1938. Augmented second edition in 1952.]
Cowles, A. Can Stock Market Forecasters Forecast? Econometrica. 1933
Jones, H. E. Time Regression Analysis. Econometrica. 1937

 

Source: Duke University. Economists’ Papers Archive in David Rubenstein Library. Papers of Franco Modigliani. Box T1, Folder “Jacob Marschak’s Course, 1940-1949”.

Image Source: Carl F. Christ. History of the Cowles Commission, 1932-1952

Categories
Chicago Economists

Cowles Commission. Evsey Domar’s Four Salient Episodes, 1947-48

 

When asked by Clifford Hildreth who was working on his project, The Cowles Commission in Chicago, 1939-1955, for suggestions and/or observations from economists who had worked at Cowles during that period, Evsey Domar had few vivid recollections to offer of his year there some thirty five years earlier. Two items were associated with Jacob Marschak, one with Lawrence Klein, and one with Kenneth Arrow.

Having written the last Ph.D. dissertation supervised by Evsey Domar, I feel it my obligation to include such nuggets of Domaresque delight as his characterization of the difference between the economist (Kenneth Arrow) and the political scientist (David Easton) whom Domar had introduced to each other: “the political scientist assumed all except what he had explicitly rejected; the economist assumed only what he had explicitly stated.” 

___________________

Carbon copy of Domar letter to Hildreth

November 26, 1982

Professor Clifford Hildreth
Department of Economics
University of Minnesota
1035 Business Administration
271 19th Avenue South
Minneapolis, NM 55455

Dear Cliff:

This is in reply to your letter of October 27th regarding my impressions of the Cowles Commission.

I really have very little to say, because my connection with the Commission was short (about a year) around 1947-48, and also because I was only nominally a member of the group. I remember four episodes:

  1. Jacob Marschak asking for another dozen years or so to make economics truly scientific.
  2. Same, discussing the economics of free (atomic) energy.
  3. Larry Klein predicting such a low GNP for (I believe) 1947, that after some six months hardly anything was left for the remainder of the year.
  4. I introduced Ken Arrow and David Easton (the political scientist) to each other. it took them some time to find a mutual language. Reason: the political scientist assumed all except what he had explicitly rejected; the economist assumed only what he had explicitly stated. Perhaps this episode was the most educational of all.

Sorry I cannot help you more.

Cordially,

Evsey D. Domar

/gjk

Source: Economists’ Papers Archive, David M. Rubenstein Library, Duke University. Evsey Domar Papers, Box 4, Folder “Correspondence Hf-Hz”.

___________________

Arrow on David Easton

The exposition of the book [Social Choice and Individual Values] was developed in the next year back in Chicago. I presented the material over a number of seminars. I was grateful to these people [Tjalling Koopmans, Herbert Simon, Franco Modigliani, T.W. Anderson, and Milton Friedman] because they thought it was a good idea, encouraged me and asked good questions; parts of the book are making clear points they found obscure.

Easton was a little different. He was the first political scientist I talked to about this. He gave me the references to the idealist position which was sort of the opposite idea. In a way the idealist position was the only coherent defense that I could see in political philosophy. It wasn’t a very acceptable position, but it was the only one that had at least a coherent view of why there ought to be a social ordering.

Source:  J. S. Kelly and Kenneth J. Arrow, An Interview with Kenneth J. Arrow, Social Choice and Welfare, Vol. 4, No. 1 (1987), pp. 55-56.

Image Source: Economists’ Papers Archive, David M. Rubenstein Library, Duke University. Evsey Domar Papers, Box 18, Folder “Photographs (Domar)”.

Categories
Chicago Exam Questions

Chicago. Money, Banking, and Monetary Policy Exam for A.M. and Ph.D. Friedman, Mints, Marschak, 1952

 

 

 

The committee for the Money, Banking and Monetary Policy examination for the A.M. and Ph.D. degrees for the Winter Quarter 1952 at the University of Chicago consisted of Milton Friedman (chairman), Lloyd Mints, and Jacob Marschak. The date of the examination was February 12, 1952 taken by 25 students. From Milton Friedman’s notes it appears that the committee agreed to pass ten examinees at the Ph.D. level, ten at the A.M. level and five were failed.

_________________________________

MONEY, BANKING, AND MONETARY POLICY
Written Examination for the A.M. and Ph.D. Degrees
Winter Quarter, 1952

 

Write on the first three and two other questions. Time: 4 hours.

DO NOT PLACE YOUR NAME ON YOUR PAPER. GIVE ONLY YOUR NUMBER.

 

  1. Suppose that (1) the national income is $270 billion; (2) the total wage bill is $180 billion; (3) the average annual wage is $3000, with only negligible variation among individual wages; (4) government’s demand for goods and services is $60 billion, and consumers’ demand is $200 billion. Suppose that, through joint action of employers and labor unions the wage rate is increased by 10%, and that the real volume of government demand is not changed. Indicate further conditions (such as, for example, the monetary policy, fiscal policy, technological conditions, initial level of employment, the behavior of consumers and of entrepreneurs) that you deem particularly important for a rough estimate of the effects of the rise in wages upon the levels of (present and future) consumption and of prices. Give two or three such estimates on the basis of your own hypothetical numerical specifications of those conditions.
  2. “It will be sound policy for the Treasury to borrow new funds insofar as possible from nonbank sources, to minimize the inflationary potential of the deficit.” (January 1952 Economic Report of the President, pp. 141-2.)
    Discuss the basis for and validity of this view. In your answer, distinguish between the effects of borrowing from the Federal Reserve Banks and from other banks; and justify your conclusions in detail.
  3. According to the Keynesian theory of income and employment, the change in money income equals the change in “investment,” or, more generally, the change in “autonomous expenditures” times the “multiplier.”
    (a) Explain the terms in quotation marks. How, if at all, does the value of the “multiplier” depend on the distribution of income, the stock of money, the rate of interest?
    (b) A shift from a balanced government budget to a deficit because of an increase in expenditures would generally be regarded as a corresponding increase in “autonomous expenditures,” and therefore, other things the same, as leading to an increase in money income equal to the multiplier times this amount. Can this statement, which suggests that any effect on money income of the deficit depends only on its size and the size of the multiplier, be reconciled with the quotation in question 2, which implies that “the inflationary potential of the deficit,” presumably meaning the rise in money income it produces, depends on the method of financing the deficit?
  4. It has been claimed that the British made the gold content of the pound sterling too high when they returned to gold in 1925. What would be the effects of such action? Did these effects actually appear to any significant degree? In any case, what means were available, if any, for determining the “correct” content of the pound?
  5. “The great difficulty, if not the impossibility, of reversing a downward movement [of business activity] by monetary means alone must be accepted as demonstrated by experience.” Is this statement warranted? Support your position.
  6. “Lowness of interest is generally ascribed to plenty of money. But money, however plentiful, has no other effect, if fixes, than to raise the price of labour…It is in vain…to look for the cause of the fall or rise of interest in the greater or less quantity of gold and silver, which is fixed in any nation” (David Hume, 1752).
    Discuss in light of “modern” theories of the rate of interest.

 

Source: Hoover Institution Archives. Papers of Milton Friedman. Box 76, Folder 9 “University of Chicago Econ 300A”. [sic, this and other money, banking and monetary policy exams have been filed with material for the price theory course]

Categories
Chicago Economists

Chicago. Simons urges the recruitment of Milton Friedman, 1945

Simons

 

 

The atomic bomb dropped on Nagasaki was less than two weeks history and the declaration of the surrender of Imperial Japan only five days old. Nothing says “back to business as usual” at the university better than active lobbying on behalf of one’s preferred candidate for an upcoming vacancy, as we see in the following memo for the 33 year old Milton Friedman written by Henry C. Simons to the Chicago economics department chair, Simeon E. Leland. The copy of this memo comes from the President’s Office at the University of Chicago. Simons’ grand strategy was to seamlessly replace the triad Lange-Knight-Mints with his own dream team of Friedman-Stigler-Hart. He feared that outsiders to the department might be tempted to appoint some convex combination of New Dealer Rexford Tugwell and trust-bustin’ George W. Stocking Sr., economists of the institutional persuasion who were swimming on the edges of the mainstream of the time.

Economics in the Rear-view Mirror also has transcribed excerpts from an earlier 77 page (!) memorandum (10 April, 1945) to President Robert M. Hutchins from Simeon E. Leland entitled “Postwar Plans of the Department of Economics–A Wide Variety of Observations and Suggestions All Intended To Be Helpful in Improving the State of the University”.

____________________________

 

Henry C. Simons Urges his Department Chair to Recruit Milton Friedman

August 20, 1945

To: Simeon E. Leland           Economics

From: Henry C. Simons        Economics

 

If Lange is leaving, we should go after Milton Friedman immediately.

It is a hard choice between Friedman and Stigler. We should tell the administration that we want them both (they would work together excellently, each improving what the other did), Friedman to replace Lange, Stigler to replace Knight and to be with us well ahead of Knight’s retirement. We might also say that we want Hart to replace Mints at Mints’s retirement, and also to be with us in advance, but are happy to have him financed by C.E.D. [Committee for Economic Development] for the present.

Yntema evidently is thinking of getting Friedman shortly. We should exploit this possibility. Milton has now a great yen for a University post and would probably turn down an offer from C.E.D., even at much financial sacrifice, if a good academic post were the alternative (as it might be, at Minnesota or elsewhere). He is rather footloose—not anxious to go back either to the Treasury or to the National Bureau. We should grab him now, offering temporary joint appointment with C.E.D. and full-time, permanent appointment when he is through with C.E.D.

Friedman is young, flexible, and available potentially for a wide variety of assignments. He is a first-rate economic theorist, economic statistician, and mathematical economist, and is intensely interested over the whole range of economic policy. He has been outstanding in every organization where he has worked—here with Henry Schultz, at the National Bureau, at the Treasury, and now recently in the Army project at Columbia. Moreover, he is one of those rare cases of able young men who have enjoyed large experience and responsibility in Washington without being at all disqualified thereby for academic work.

The obvious long-term arrangement is a joint appointment with the Cowles Commission. Marschak would, I’m sure, like to have him; and Milton would like to settle into a major project of empirical research, e.g., on enterprise size and productional efficiency. Bartky may be expected strongly to support the appointment, for its strengthening of the University in statistics. The School of Business could well use Milton, to give its few advanced courses in statistics, if Yntema continues to price himself out of the University. Moreover, Milton probably would be delighted to work partly in the Law School, and be extremely useful there. In the Department, he would be available for statistics, mathematical economics, pure economic theory, taxation, and almost any field where we might need additional courses.

If University officers want outside testimony, they could get it from Randolph Paul or Roy Blough (as regards the Treasury), from Arthur F. Burns (National Bureau), from Abraham Wald, Allen Wallis, and Barky (as regards war research), and from Bunn at Wisconsin (as regards possible usefulness to the Law School)—not to mention George Stigler, Harold Groves, Wesley Mitchell, Simon Kuznets, Erwin Griswold, et al.

Perhaps the best thing about Milton, apart from his technical abilities, is his capacity for working as part of a team. He is the gregarious kind of intellectual, anxious to try out all his ideas on his colleagues and to have them reciprocate. He would doubtless be worth his whole salary, if he neither taught nor published, simply for his contribution to other people’s work and to the Department group as a whole. But he is also intensely interested in teaching, and far too industrious not to publish extensively. Our problem would be not that of finding ways to use him but that of keeping him from trying too many tasks and, especially, of leaving him enough time for his own research.

It would, I think, be good policy and good tactics to submit a major program of appointments, including [Frank W.] Fetter, Friedman, Stigler, Hart, and an economic historian (Innis or Hamilton), in the hope of getting them all within a few years, some on joint appointments with, notably, the Cowles Commission, the Law School, the School of Business (?) and, temporarily, the C.E.D. Research Staff. Such a program would serve to protect us against administration pressure for less good appointments (e.g.,  Stocking [George Ward Stocking, Sr., Ph.D. Columbia, 1925]), and from Hutchins’s alleged complaint that, while he wanted to consider major appointments in economics, the Department simply would not make recommendations. We should, in any case, err on the side of asking for more appointments than we can immediately get. Otherwise, available funds may go largely elsewhere—e.g., into Tugwell-like, lame-duck appointments, and into Industrial Relations, Agricultural Economics, and other ancillary enterprises, at the expense of the central field of economics.

There is, I trust, substantial agreement within the Department, on the men mentioned above. This fact, if fact it is, should be made unmistakably clear to the administration.

Incidentally, if we are going to explore possibilities of an appointment in American economic history (and I’m probably alone in opposing), we should do so only in co-operation with the History Department and with (from the outset) joint plans for joint appointments.

 

HCS-w

 

Source: University of Chicago Archives. Office of the President. Hutchins Administration. Records. Box 73, Folder “Economics Dept., 1943-45”.

Image Source: University of Chicago Photographic Archive, apf1-07613, Special Collections Research Center, University of Chicago Library.

Categories
Chicago Economists

Chicago. Historical Enrollment Trends, Economics Faculty by Age and Educational Background. 1944-45.

__________________________

On April 10, 1945, the chairman of the University of Chicago’s economics department, Professor Simeon E. Leland, submitted a 77 page (!) memorandum to President Robert M. Hutchins entitled “Postwar Plans of the Department of Economics–A Wide Variety of Observations and Suggestions All Intended To Be Helpful in Improving the State of the University”.

In his cover letter Leland wrote “…in the preparation of the memorandum, I learned much that was new about the past history of the Department. Some of this, incorporated in the memorandum, looks like filler stuck in, but I thought it ought to be included for historical reasons and to furnish some background for a few of the suggestions.” 

In a recent post I provided a list of visiting professors who taught economics at the University of Chicago up through 1944 (excluding those visitors who were to receive permanent appointments). For this post I have selected a few supporting tables from the memo providing data on the age distribution and educational backgrounds of the economics faculty along with time series on enrollments and registrations.  A later post provides talent-scouting lists for possible permanent, visiting and joint appointments.

______________________________

In making his plea for administration support for new additional hires, Chairman Leland began by noting that in 1944 Professor Chester Wright “was transferred to the emeritus status”. Negotiations with Professor H. A. Innis of the University of Toronto to succeed Wright were taking place but Leland did not appear to be overly confident, having written “If he [Innis] does not [accept a Chicago offer], due to the scarcity of men in Economic History, the post occupied by Professor Wright will be very difficult to fill.”

Looking ahead over the six years before the retirements of Knight and Kyrk were scheduled, Leland hoped to get support to begin the process of hiring younger faculty (only three of the staff were under 40 years of age as of the end of 1944), so that  (1) gaps in the existing program would not occur and (2) promising new fields could be covered.

Furthermore Leland argued “…the Department does not seem to have enough young men as instructors and assistant professors. As a result, the chores of running a department, including sharing in administration and advising students, fall heavily on the older, higher-salaried men on the staff.”

 

Ages of Staff Members
(as of December 31, 1944)

Name

 Rank Age

Came to University of Chicago
Bloch, Henry Simon

Instructor

 29

1939
Douglas, Paul Howard

Professor*

 52

1920
Harbison, Frederick Harris

Assistant Professor

 33

1940
Knight, Frank Hyneman

Professor

 59

1917-19; 1927
Kyrk, Hazel

Professor; also Home Economics

 59

1925
Lange, Oscar

Professor

 40

1938
Leland, Simeon Elbridge

Professor; also Political Science

 47

1928
Lewis, Harold Gregg

Instructor*

 30

1939
Marschak, Jacob

Professor

 46

1943
Mints, Lloyd Wynn

Associate Professor

 56

1919
Nef, John Ulric

Professor; also History

 45

1929
Schultz, Theodore William

Professor

 42

1943
Simons, Henry Calvert

Associate Professor

 45

1927
Viner, Jacob

Professor

 52

1916

This list does not include part-time instructors (3), research associates (3), lecturers, or members of the college staff (3).

*On leave for military service

______________________________

To reassure the President that the department was not in danger of “inbreeding” the following table was included in the memo. Leland’s first comment was that the educational backgrounds of the economics faculty included some 18 U.S. and 13 foreign institutions. While noting a significant concentration of Harvard and/or Chicago training of the economics faculty, only five of the fourteen actually had advanced training at Chicago and of those just two held Ph.D.’s from Chicago as of 1945 (Kyrk and Leland).

 

Educational Institutions Attended by Members of the Department of Economics

 

Name and Rank Degrees or Advanced Training Other Work
A.B. A.M. Ph.D.
H. S. Bloch
(Instructor)		 Nancy* Nancy Strasbourg*
Paris’
Nancy (Dr. en Droit)		 Acad. Int’l. Law
The Hague
P. H. Douglas
(Professor)		 Bowdoin Columbia Columbia Harvard
F. H. Harbison
(Asst. Prof.)		 Princeton Princeton Princeton
F. H. Knight
(Professor)		 Tennesee(B.S.)
Milligan (Ph.B.)		 Tennessee Cornell University American University, Harriman, Tennessee
H. Kyrk
(Professor)		 Ohio Wesleyan*
Chicago (Ph.B.)		 Chicago
O. Lange
(Professor)		 Poznan* Cracow (LL.M.) Cracow (LL.D.) London
S. E. Leland
(Professor)		 De Pauw Kentucky Chicago Harvard Law School
H. G. Lewis
(Instructor)		 Chicago Chicago* Chicago*
J. Marschak
(Professor)		 Oxford Heidelberg Technolog. Institut, Kiev
Berlin
L. W. Mints
(Assoc. Prof.)		 Colorado Colorado Chicago*
J. U. Nef
(Professor)		 Harvard (B.S.) Paris*
London*
Montpellier*		 Brookings
T. W. Schultz
(Professor)		 South Dakota State Wisconsin Wisconsin
H. C. Simons
(Assoc. Prof.)		 Michigan Michigan* Iowa*
Chicago*
Columbia*
Berlin*
J. Viner
(Professor)		 McGill Harvard Harvard

*Work taken at this level; no degree conferred.

______________________________

 

Two time series were included in Leland’s memo to provide evidence for an upward trend in the demand for economics courses: enrollments and course registrations.

It is difficult to forecast the postwar enrollment in Economics. Since 1928 there has been a steady upward trend in the number of students majoring in the Department, as is shown in the following table. Even the depression only slightly retarded the growth of our student body. Part of the increase was due to the emphasis given our subject matter by the events of the Thirties. Another factor responsible for the gain in students was the strength of the faculty—its reputation in the United States and abroad.

 

Total Number of Different Graduate Students Majoring in the Department of Economics Who Have Been in Residence a Part or All of the Years Indicated Below

 

Years

 Number of Students
1943-44

57

1942-43

77

1941-42

 133
1940-41

162

1939-40

 156
1938-39

144

1937-38

 133
1936-37

113

1935-36

 111
1934-35

98

1933-34

 114
1932-33

111

1931-32

 125
1930-31

113

1929-30

 118
1928-29

101

 

The trend of registrations in the Department for “200- and 300-level courses” (roughly corresponding to former undergraduate and graduate registrations) is shown in the following table. Data are shown only since 1931-32 inasmuch as statistics prior to that date included introductory courses for College freshmen and sophomores. This inflates all statistics prior to 1931 and destroys their validity for comparative purposes. The peak of enrollment in Economics came in 1938-39. It is believed that comparable enrollments will reappear soon after the cessation of hostilities.

 

Registration in Courses Offered by the Department of Economics

Years

Quarters
Summer Autumn Winter

Spring

First Term

Second Term

1944-45

 74
1943-44 62 202 138

185

1942-43

 252 237 249 207 153
1941-42 214 206 329 396

406

1940-41

 264 225 455 529 516
1939-40 262 224 431 589

583

1938-39

 277 244 560 516 689
1937-38 249 214 477 447

592

1936-37

 243 206 407 438 457
1935-36 245 218 367 503

534

1934-35

 239 206 325 460 398
1933-34 183 174 361 371

396

1932-33

 278 244 337 427 244
1931-32 233 224 443 411

339

 

Source: University of Chicago Library, Department of Special Collections. Office of the President. Hutchins Administration Records. Box 73, Folder “Economics Dept., “Post-War Plans” Simeon E. Leland, 1945″.

 

Categories
Chicago Exam Questions Fields

Chicago. Ph.D. Exam for Money, Banking and Monetary Policy, 1946

This transcribed Ph.D. examination for Money, Banking and Monetary Policy comes from a copy of the exam in the papers of Norman Kaplan at the University of Chicago archives. According to the Course Announcements, this field was covered by four quarter courses: both Money (330) and Banking Theory and Monetary Policy (331), and either The Theory of Income and Employment (335) or Business-Cycle Theory (432). In 1945-46 the first two courses were taught by Lloyd Mints. Jacob Marschak and Oscar Lange were scheduled to teach Economics 335 and 432, respectively, but I believe Lange was away that year in Washington, D.C. In any event the questions reveal emphasis on the material covered by Mints.

_________________________

 

MONEY, BANKING AND MONETARY POLICY
Written examination for the Ph.D.

Autumn Quarter, 1946

 

Time: 4 hours. Answer all questions.

 

  1. Discuss the effect of tax reduction on employment.
  2. Discuss the comparative advantages of fixed and flexible foreign exchange rates.
  3. A newspaper story of Jan. 21, 1946, on President Truman’s budget message, had the following headlines and first two paragraphs:

“TRUMAN MAPS FIRST DEBT CUT SINCE 1930
CASH ON HAND TO OFFSET ’47 DEFICIT.

“Washington—President Truman’s first budget proposes to spend $4,300,000,000 more that the government will collect, but for the first time since 1930, it won’t increase the national debt.
“Mr. Truman proposes to withdraw from the Treasury sufficient funds no only to offset this deficit but also to reduce the debt by $7,000,000,000.”

Discuss the monetary effect of this budget proposal. Would one expect the proposed debt cut to be deflationary or inflationary? Why? How would the effect compare with such alternatives as refunding the debt? Borrowing more to add to cash balances?

  1. The average amount of money (deposits plus hand-to-hand currency) in circulation in 1929 was $55 billion. At present (1946) the stock of money is $170 billion, or approximately three times the $55 billion of 1929. If we assume that the volume of transactions would normally (with a continued high level of employment) increase at the rate of 4% per annum, the volume of transactions in 1947, with a high level of employment, would then be approximately twice that of 1929 (1 compounded annually at the rate of 4% for 18 years amounts to 2.03). If we then assume that velocity will be the same in 1947 as it was in 1929, and that the stock of money will be the same in 1947 as in late 1946, we have approximately the following index numbers for 1947, using 1929 as a base:

M = 3.0
V = 1.0
T = 2.0

Therefore      P = 1.5

Discuss the reasonableness of the various assumptions made in this analysis and of 1.5 as the possible index of the price level in 1947. Is there any good reason for using 1929 as the base year rather than, say, 1940?

  1. The following statement, made in a recent CED [Committee for Economic Development] monograph, refers to the high post-war level of holdings of cash and government bonds by the public as compared with pre-war holdings:

“It is sometimes implied that the liquid assets will disappear as they are used. But money is not extinguished by use; it simply passes from the hand of the buyer to the hand of the seller. The use of liquid assets by some members of the public to buy goods, services, or securities from other members of the public will not reduce total liquid-asset holdings but only transfer their ownership.”

Suppose the liquid assets were used to such an extent as to bring on a substantial rise in the price level. Does the fact that they are not extinguished by use imply that the danger, from this source, of a further rise in prices would be unchanged?

 

Source: University of Chicago Archives. Norman M. Kaplan Papers, Box 3, Folder 5.

Image Source: 1936 Social Science Research Building. University of Chicago Photographic Archive, apf2-07476, Special Collections Research Center, University of Chicago Library.

Categories
Chicago Economists

Chicago. Milton Friedman from Cambridge to T.W. Schultz. 29 Mar 1954

About a week ago I posted Milton Friedman’s letter from Cambridge, England to T. W. Schultz dated 28 October 1953. Today we have the next carbon copy of a letter to Schultz from Cambridge in the Milton Friedman papers at the Hoover Institution in which Friedman discusses a range of issues from a one-year appointment in mathematical economics at Chicago, the Cowles’ Directorship appointment, and postdoctoral fellowships. The letter ends with a laundry-list of miscellaneous comments from Arthur Burns’ Economic Report to the President through the reception of McCarthy news in England. Friedman’s candid assessments of many of his fellow-economists make this letter particularly interesting.  More to come!

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If you find this posting interesting, here is the complete list of “artifacts” from the history of economics I have assembled. You can subscribe to Economics in the Rear-View Mirror below. There is also an opportunity for comment following each posting….

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Milton Friedman to T.W. Schultz
29 March 1954

15 Latham Road
Cambridge, England
March 29, 1954

 

Dear Ted:

Of the people you list as possible visiting professors while Koopmans is away, Solow of M.I.T. is the one who offhand appeals to me the most. I have almost no doubt about his absolute competence: I read his doctoral dissertation at an early stage and saw something of him last summer and the preceding summer when he was spending some time at Hanover in connection with one or another of Bill Madow’s projects. He has a seminal mind and analytical ability of a very high order. My only questions would be the other that you raise, whether he is broadly enough interested in economics. And here I am inclined to answer with an uncertain yes, relying partly on the fact that he is flexible and capable of being induced. I do not know Dorfman of California either personally or through his writings. My question about him is that I believe that we would do best if we could use this opportunity in general to bring in someone with a rather different point of view and who will provide a broadening of the kind of thing done under the heading of mathematical economics, and my impression is that Dorfman is very much in the same line as Koopmans – but here too, I don’t have much confidence in my knowledge. As you know, I think very highly of both Modigliani and Christ, but as of the moment for this particular spot, would prefer Solow, partly on grounds of greater differentiation of product.

One rather harebrained possibility that has occurred to me outside your list is Maurice Allais, the French mathematical economist who is Professor at École des Mines. Allais is a crackpot genius in many respects. He came out of engineering and is largely self taught, which means he holds the erroneous views he has discovered for himself as strongly as the correct ones. I have always said that if he had, at a formative age, had one year of really good graduate education in economics he might have become one of the really great names. At the same time, Allais is an exceedingly active and stimulating person who works in mathematical economics of a rather different kind than we have been accustomed to. I think it would be a good thing to have him around for a year – both for us and him – though I am most uncertain that it would be for a longer period. I don’t have any basis for knowing whether Allais would be interested.

I have tried to think over the other European mathematical economists to see if they offer other possibilities. There are others in France: Guilbaud [Georges-Théodule Guilbaud (1912-2008)], Boiteux [Marcel Boiteux (1922-)] (I don’t have that spelled right), but none seem to me as good as Allais for our purposes. There are Frisch and Haavelmo in Norway, Wold in Sweden; of these, Haavelmo would be the best. I find it hard to think of anybody in England who meets this particular bill, and would be at all conceivable. Dick Stone? Has just been over and is not primarily mathematical but might be very good indeed in some ways. Is certainly econometric minded and fairly broadly so. R.G.D. Allen? Has done almost nothing in math. econ. for a long time.*

*[handwritten footnote, incomplete on left side presumably because carbon paper folded on the corner:   “…real possibility here is a young fellow at the London School, A. W. Phillips…invented the “machine” Lerner has been peddling. He came to econ. out of ….good indeed. He has an important paper in the mathematics of stabilization (over) policies, scheduled to appear(?) in Econ. Journal shortly.”]

Getting back home, the names that occur to me have, I am sure, also occurred to you. Is Kenneth Arrow unavailable for a year’s arrangement? What about Vickrey? I don’t believe that in any absolute sense I would rate Vickrey above Christ, say, but for us he has the advantage of bringing a different background and approach.

The above is all written in the context of a definite one-year arrangement in the field of mathematical economics. I realize, of course, that this may turn out to be an undesirable limitation. This is certainly an opportunity to try someone whom we might be interested in permanently; and it may be possible to make temporary arrangements for math. econ. for the coming year – via DuBrul, Marschak, etc. The difficulty is that once I leave this limited field, the remainder is so broad that I hardly know where to turn. For myself, I believe we might well use this to bring someone in in money, if that possibility existed. If it did, I should want strongly to press on you Harry Johnson, here at Cambridge, but originally a Canadian educated at the University of Toronto, who is the one new person I have come to know here who has really impressed me.

One other person from the US left out of the above list but perhaps eligible even within the narrower limitations is William Baumol. Oughtn’t he be considered?

Within the narrower limitations, my own listing would, at the moment, be: Allais, Solow, Baumol, Arrow, Vickrey, Phillips. I would hasten to add that my listing of Arrow fourth is entirely consistent with my believing him the best of the lot in absolute competence, and the one who would still go to the top of this list for a permanent post.

I turn to the other possibility you raise in your letter, a permanent post a la the Tobin one. I am somewhat puzzled how to interpret the change of view, you suggest, I assume that the person would be expected to take over the directorship of Cowles. If this is so, it seems to me highly unfortunate to link it with a permanent post in the department. Obviously, the best of all worlds would be if there were someone we definitely wanted as a permanent member of the department who also happened to be interested in the Cowles area and was willing to direct, or better interested in directing, Cowles. In lieu of this happy accident, I would myself like to see the two issues kept as distinct as possible; to have the Cowles people name a director, with the aid and advice but not necessarily the consent, of the department; have the department offer him cooperation, opportunity to teach, etc., but without having him a full-fledged permanent member. I hope you will pardon these obiter dicta. I realize that this is a topic you have doubtless discussed ad nauseam; what is even more important, if after such discussion, you feel differently, I would predict that you would succeed in persuading me to your view; which is why I leave it with these dicta and without indicating the arguments – you can provide them better than I.

The issue strikes me particularly forcefully because I do feel that in terms of the needs of the department, our main need is not for someone else mainly in the Cowles area; it is for someone to replace either Mints in money, or me in orthodox theory, if I slide over to take Mints’ role.

For Cowles’ sake as well as our own, there might be much to be said for having the directorship be the primary post for whoever comes. It seems to me bad for Cowles to have that post viewed as either a sideshow or a stepping stone. For directorship of Cowles, some names that occur are: Herbert Simon; Dorothy Brady; with more doubt Modigliani. One possibility much farther off the beaten track is Warren Nutter, who has, I gathered, been a phenomenal administrative success in Wash. at Central Intelligence Agency; yet is an economist. Would Charlie Hitch, who has been running Rand’s economic division be completely out?

[Handwritten note: “You know, Gregg Lewis might be better than any of these if he would do it!]

If the post is to be viewed as primarily a professorship in the department, with Cowles directorship as a sideline, I have great difficulty in making any suggestions: I would not, in particular, be enthusiastic about any of those mentioned in the preceding paragraph. Arrow, yes, but he is apparently out. Simon Kuznets, yes, but he would be likely to make Cowles into something altogether different that it is. I feel literally stuck in trying to think of acceptable candidates. Perhaps I can be more useful in reacting to other suggestions.

Let me combine with this some comments on your March 15 letter, which I should have answered long since.

On the post-doctoral fellowship, I feel less bearish than you, primarily, I suppose because I am inclined to lay a good deal of emphasis on the intangible benefits from having a widespread group of people who have had a year at Chicago. It seems to me that a post-doctoral fellowship is more likely to do this than a staff appointment, both because it is likely to bring in a wider range of people to apply and because it is rather more likely to have a one or two year limit and so a more rapid turnover. What has disappointed me most is the limited number of people among whom we have been forced to choose. Why is it that we don’t get more applications? Is it because we do treat it now like a staff appointment? Do we advertise it as widely as we might and stimulate a considerable number of applicants? Or is it simply because the great increase in number of post-doctoral fellowships available (and decrease in quality of people going in for economics?) has lowered the demand for any one fellowship? I find it hard to believe that making it into a staff appointment would help much in providing more adequate review and appraisal – this is I believe a result of the limitations of time on all of us – but it might give it greater prestige and make it more valuable to the recipient in this way, though, it would cost him tax and limit freedom.

I believe that part of the problem you raise about the postdoctoral fellowship has little to do with it per se but is a general problem about the department. Is our own work subject to as much discussion and advice from our colleagues as each of us would like? The answer seems to me clearly no. The trouble is – and I am afraid it is to some extent unavoidable and common at other places – that we have so many other duties and tasks to perform that being an intellectual community engaged in cross-stimulation perforce takes a back seat. This disease is I think one that grows as the square of the professional age. From this point of view, I think that the more junior people around the better in many ways and I think this one of the real virtues of the development of research projects that will enable us to keep more beginners around.

On the whole, I continue to think that the fellowship idea is sound, in the sense that we ought to have a number of people around who have no assigned duties. I would defend the Mishan result in these terms. I think he was a most useful intellectual stimulant and irritant to have around even if his own output was not too striking. The virtue of the fellowship arrangement is that it enables you to shape the hole to the peg. I cannot of course judge about Prais. But I am surprised by your adverse comments on Dewey’s use of it; I would have thought his one of the clearly most successful post-doctoral fellowships so far.

As you have doubtless heard, Muth has decided to go to Cowles. I am sorry that he has. I think he is good. I am somewhat troubled about the general problem of recruiting for the Workshop at a distance. In addition to Muth, I had heard from Pesek, whom I encouraged but left the matter open because he would rather have a fellowship that he applied for that would pay his travelling expenses to Washington. My general feeling is that it would be a mistake to take anyone just because I am not on the spot, that it would be far better to start fairly slowly, and let the thing build up, adding people as they turn up next year. Any comments or suggestions would be greatly appreciated.

I am delighted to hear about Fred’s ford project. I had a wire from Willits recently re Harberger and I assume it was in connection with his proposed project. Al Rees will be a splendid editor, I feel, and it is excellent to have him entirely in the department. I hardly know what to think of Morton Grodzins as Dean. I assume that his appointment measn that he was regarded as a successful administrator at the Press. Grodzins has great drive and energy, is clearly bright and intelligent, but whether he has the judgment either of men or of directions of development that is required, and the ability to raise money that Tyler displayed, is something I have less confidence in. Who is taking over the Press?

I enjoyed your comments on both Arthur Burns and McCarthy. With respect to the first, I thought the economic report extraordinarily good, both in its analysis of the immediate situation and in its discussion of the general considerations that should guide policy. It showed courage, too, I think in its willingness to say nasty things about farm supports and minimum wages to mention two. My views about the recession are indicated by the title of a lecture I am scheduled to give in Stockholm towards the end of April: “Why the American Economy is Depression-proof”. After all, there is no reason why Colin Clark should be the only economist sticking his neck out. It continues to seem to me that the danger to be worried about is over-reacting to this recession and in the process producing a subsequent inflationary spurt. Arthur seems to me to be showing real courage in holding out against action. To do something would surely be the easy and in the short run politically popular course.

McCarthyism has of course been attracting enormous attention here. Indeed, for long it has crowded almost all other American news into the background with the result that it has given a thoroughly distorted view of America to newspaper readers. I enclose a clipping in this connection which you may find amusing. it is not a bad summary, though I trust I put in more qualifications.

We have gotten an opportunity to go to Spain via an invitation to lecture at Madrid (Earl’s doing, I suspect), so Rose and I are leaving next week for a week there. Shortly after our return we go to Sweden and Denmark for a couple of weeks. We are very much excited by the prospects. Best regards to all.

Yours

[signed]
Milton

 

Source: Hoover Institution Archives. Milton Friedman Papers. Box 194, Folder “194.6 Economics Department S-Z, 1946-1976”.

 

Image: Left, Milton Friedman (between 1946 and 1953 according to note on back of photo in the Hoover Archive in the Milton Friedman papers). Right, Theodore W. Schultz from University of Chicago Photographic Archive, apf1-07484, Special Collections Research Center, University of Chicago Library.